223_Hwk_10_Solutions - HA 223 Fall 2006 Homework 10...

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HA 223 – Fall 2006 – Homework 10 – Solution M10–2 . Principal $800,000 × 0.6806 = $544,480 Interest $ 64,000 × 3.9927 = 255,533 Issue Price = $800,013* *Issue price should be exactly $800,000. The $13 difference is the result of rounding the present value factors at four digits. M10–3 . Principal $300,000 × 0.3220 = $ 96,600 Interest $ 30,000 × 5.6502 = 169,506 Issue Price = $266,106 M10–4. January 1, 2006: Cash (+A). .............................................................................. 753,000 Discount on Bonds Payable (+XL, -L). ................................... 47,000 Bonds Payable (+L). .......................................................... 800,000 December 31, 2006: Bond Interest Expense (+E, -SE) ($753,000 × 11%) . .......... 82,830 Discount on Bonds Payable (-XL, +L). ............................... 2,830 Cash (+A) ($800,000 × 10%) . ........................................... 80,000 M10–5. January 1, 2006: Cash (+A). .............................................................................. 580,000 Discount on Bonds Payable (+XL, -L). ................................... 20,000 Bonds Payable (+L). ........................................................... 600,000 December 31, 2006: Bond Interest Expense (+E, -SE). .......................................... 62,000
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This homework help was uploaded on 02/19/2009 for the course HA 230 taught by Professor Davidlee during the Fall '06 term at Cornell University (Engineering School).

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223_Hwk_10_Solutions - HA 223 Fall 2006 Homework 10...

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